From Site Selection magazine, January 2002
REAL ESTATE SERVICES
Edited by MARK AREND

Survey: Efficiency Issues Challenge Lenders' Profitability

Mortgage lenders' profitability - already on shaky ground - is being jeopardized by inefficiency and insufficient use of technology, according to a recent survey conducted by Ernst & Young's Real Estate Advisory Services Group. The survey was sponsored by CapitalThinking, a financial services technology firm. Ten of the largest commercial mortgage lenders participated in the survey.
        Management and transference of large amounts of data are key operational weaknesses, the survey reveals, and technology investments tend to benefit the underwriting function rather than the origination and closing processes. Only one of the 10 respondents could electronically generate legal documents from its loan database, and none can receive data electronically from their borrowers.
        Much of the inefficiency comes from having to re-enter data manually into various systems due to a lack of automated systems or incompatibility among systems. Another barrier is difficulty accumulating the data of multiple lenders pooling assets for a securitization and efficiently transmitting that data to ratings agencies and investors. Still other factors challenging lenders' profitability are the fixed costs associated with minimum required staffing levels during periods of low origination volume and the time-consuming quality control procedures necessary to ensure data integrity in light of process and system inadequacies.
        "The good news is that lenders are already exploring the array of new, Web-based technology available to the industry that promise to streamline the flow of information and make the lenders' business more efficient from origination through closing and securitization," says Joseph Rubin, director of the E&Y Real Estate Advisory Group's Financial Services practice.

Service Providers on the Move...

Les J. Cranmer and Art M. Wegfahrt have relocated their individual consulting practice from Deloitte & Touche/Fantus Consulting to the Philadelphia office of Julien J. Studley, Inc. Their practice handles strategic planning, location advisory services, incentives structuring and negotiations, project delivery and project team assembly, program management oversight and financial analysis.

David M. Montross has joined Equis Corp. as chief operating officer responsible for managing occupancy requirements for corporations and professional client firms. His last assignment was managing director at Jones Lang LaSalle, where he managed strategic planning and new business development. Timothy Schroeder has joined Equis Corp. as vice president in the corporate asset management group. He previously was CEO and co-founder of MyBuilderOnline, an Internet start-up for homebuilders.

Andrew Perille has been promoted from vice president to senior project manager at Trammell Crow in Illinois. He will continue to be responsible for leadership of the Midwest project management group representing investors and users/owners for large projects.

Robert E. Griffin, Jr., has joined Cushman & Wakefield as president of the New England area. Working in Boston with Thomas L. Collins, New England area leader and branch manager, Griffin is responsible for business development and recruitment. He worked previously as managing principal, investment services group, at Trammell Crow.

ARCADIS G&M, a consulting firm, has hired John England as associate vice president and area manager responsible for overseeing Denver operations. His group provides project management and business development for infrastructure, environmental and communications projects.

Chicago-based Paine/Wetzel ONCOR International has hired Michael L. Gazzola as executive vice president. He will supervise daily operations and serve as liaison to the ONCOR International network. He joins the firm from Leopardo Companies where he was vice president of the industrial/office market.

Marc Kim has joined Kosmont Realty Corp. as director in the retail real estate division. He will focus on national tenant representation and the sale, leasing and development of community shopping centers, net leased properties and other investments. He previously worked at Grubb & Ellis.

John Buttarazzi has been appointed senior managing director of Grubb & Ellis's Public/Private Advisory Group, which will support public and private-sector clients in asset partnerships and economic development strategies that enhance efficiency and economic return. He previously was senior vice president of the Empire State Development Corporation Privatization Group. Grubb & Ellis also has promoted Robert H. Osbrink to the position of executive vice president and regional managing director of its Southern California operation. He previously was regional managing director of the company's five Los Angeles area offices. Site Selection





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